Beat Outsourcing's Unwanted Byproducts
Logistical challenges and inefficiencies are often unwanted byproducts of a globalized industrial distribution enterprise.
AquaPhoenix, a U.S. manufacturer and distributor of water treatment chemicals, was a company whose global presence and reliance on outsourcing necessitated a reorganization of its international supply chain. Furthermore, its desire to achieve a better level of efficiency in its Hanover, PA-based warehouse resulted in an overhaul and redesign of the facility.
The company called on a logistics and supply chain management company to help its address its needs and goals. AquaPhoenix eventually hired UPS to study, evaluate, and improve both its outsourcing efforts and its warehouse operations.
According to Matt Hanna, Industrial Manufacturing Segment Marketing Manager for UPS, companies like AquaPhoenix often find themselves re-thinking most, if not all, of their business processes in an effort to cut cost and increase efficiency and profit.
“Once some of these people have bitten into the (efficiency) apple, they’re not stopping,” said Hanna. “Once you discover that you can find efficiencies and reduce cost, you continue to want to do so.”
UPS helped AquaPhoenix improve its business processes in two distinct ways. First, it provided Aqua Phoenix multi-modal flexibility and shipment tracking for outsourced products. Second, UPS tweaked the workflow patterns and redesigned the layout of AquaPhoenix’s Hanover plant to optimize efficiency.
Since AquaPhoenix outsources quite a bit from Asia, it was vital for the company to find the most cost-effective and streamlined way to move products.
“They were bringing those things from Asia, through the Panama Canal, back up through the East Coast of the United States to their facility, and then distributing from there,” said Hanna.
According to Hanna, UPS Trade Direct was the ideal solution for AquaPhoenix’s outsourcing needs.
“From today’s technology, of being able to share information and having this ordering information already on hand, what we were able to help them do is use our UPS Trade Direct product to actually put a label on those packages and package them in Asia,” said Hanna, whose company helped AquaPhoenix implement the basic Trade Direct service in May of 2008 and make upgrades and changes to that service in early 2009. “(Then they) put them on as one consolidated shipment … landing in the West Coast, then distributing from the West Coast.”
By sending its products in one consolidated shipment from Asia to the United States, AquaPhoenix now saves about five or six days of transit time per ocean movement. Once those products arrive on the West Coast, they are shipped via truck directly to customers.
The successful implementation of UPS Trade Direct was not only measure taken by AquaPhoenix to trim costs and increase efficiency. The UPS Customer Service Team analyzed and evaluated Aqua Phoenix’s warehouse operations to see if there were ways to improve workflow and productivity.
Alternations were made to the warehouse layout, leading to changes in the workflow and workstation arrangement. Before those changes were implemented, the fastest-moving items were positioned too far from the packing area and order processing procedures needed to be tweaked. Now, employees corral the items within an order and send them down a roller conveyor, where they are packed by other employees. Furthermore, UPS repositioned the highest-moving items so they were closest to the packing area. Lastly, UPS assisted AquaPhoenix in its planning of two new warehouse additions.
The efficiency-improving efforts allowed AquaPhoenix to trim its fulfillment time in half, from four days to two days.
According to Hanna, UPS’s working relationship with AquaPhoenix is a fitting example of how his company offers and helps implements business process solutions. “We really tried to engage them in their business processes, and what business processes can we add value and help our customers to improve,” he said.